Agenda item

That the Committee:

1.   notes with concern the announcement by Aberdeen Harbour Board that the contractor for the Aberdeen South Harbour development, Dragados UK, has withdrawn from the contract with effect from 15th June 2020;

2.   notes the significant challenges Aberdeen Harbour Board are facing as a result of Ferry, Cruise and Energy Sector Operators reducing activity in response to COVID-19 and the wider impact of reduced oil and gas prices;

3.   notes Aberdeen Harbour Board’s concerns the impact of these challenges may have on the future delivery of the harbour expansion project;

4.   notes the strategic importance of the Aberdeen South Harbour development; and

5.   instructs the Chief Officer City Growth to bring a report to the next meeting of either the Urgent Business Committee or City Growth and Resources Committee, whichever is sitting first, detailing the progress Aberdeen Harbour Board have made in securing a new contractor, the impact on the completion date and the wider impact of any delay in delivery of economic growth to the wider local economy.

The Committee had before it the following Notice of Motion by Councillor Alex Nicoll:-

That the Committee:-

1.    notes with concern the announcement by Aberdeen Harbour Board that the contractor for the Aberdeen South Harbour development, Dragados UK, has withdrawn from the contract with effect from 15th June 2020;

2.    notes the significant challenges Aberdeen Harbour Board are facing as a result of Ferry, Cruise and Energy Sector Operators reducing activity in response to COVID-19 and the wider impact of reduced oil and gas prices;

3.    notes Aberdeen Harbour Board’s concerns the impact of these challenges may have on the future delivery of the harbour expansion project;

4.    notes the strategic importance of the Aberdeen South Harbour development; and

5.    instructs the Chief Officer City Growth to bring a report to the next meeting of either the Urgent Business Committee or City Growth and Resources Committee, whichever is sitting first, detailing the progress Aberdeen Harbour Board have made in securing a new contractor, the impact on the completion date and the wider impact of any delay in delivery of economic growth to the wider local economy.

Councillor Alex Nicoll moved, seconded by Councillor Yuill:-

That the Committee approve the Notice of Motion.

The Convener, moved as an amendment, seconded by the Vice Convener:-

That the Committee:-

1.    notes Aberdeen Harbour Board are a separate entity from Aberdeen City Council with its own Board of Directors who have autonomous powers to make decisions for Aberdeen Harbour Board without the need to consult Aberdeen City Council;

2.    notes the announcement by Aberdeen Harbour Board that the contractor for the Aberdeen South Harbour development, Dragados UK, has withdrawn from the contract with effect from 15th June 2020;

3.    notes the COVID-19 crisis and the public health response to control the virus has already had a detrimental economic impact on Aberdeen and global economies;

4.    notes Aberdeen Harbour Board has written to the Scottish Government to ask for the opportunity to explore how business support measures might be applied to reduce the impact COVID-19 will have on the future of the Aberdeen South Harbour expansion project;

5.    notes Aberdeen Harbour Board’s concern, regarding the impact these challenges may have on the future delivery of the Aberdeen harbour expansion project and the impact this will have on the Scottish economy given the Aberdeen Harbour Extension is estimated to delivery approximately £1billion GVA for the Scottish Economy by 2035;

6.    notes the strategic importance of the Aberdeen South Harbour development as the project is recognised as a cornerstone to the development of Aberdeen as the Energy Transition capital of Europe;

7.    agrees the proposed Energy Transition Zone promotes and bolsters the Scottish Government’s four-step economic plan – response, reset, restart and recover for the Scottish economy post-crisis and the pathway to achieving it, which includes support for near-term growth and employment as part of the pathway;

8.    notes the Scottish Government’s response to the letter sent by the Chief Executive following the last Urgent Business Committee meeting which stated, amongst other things, that the £62m Scottish Government investment clearly compliments and support the positive ambitions laid out in the Net Zero Vision and corresponding Strategic Infrastructure Plan focussed on Energy Transition;

9.    notes the Scottish Government welcomes the effort made by the Administration Budget in March 2020 to take carefully planned and deliberate action to contribute to the Scottish Governments net zero targets;

10.notes the Co-Leaders of the Council and Officials have set up a conference call with the UK government to discuss the Council’s Net Zero Vision and corresponding Strategic Infrastructure Plan focussed on Energy Transition;  and

11.instructs the Chief Executive to forward the letter set out below to the Scottish Government asking them to explore direct financial support measures for Aberdeen Harbour Board given the difficulties described above, and thereafter upon reply from the Scottish Government to bring a report to the City Growth and Resources Committee, detailing the progress Aberdeen Harbour Board have made in securing funding from the Scottish Government, securing a new contractor, the impact on the completion date and the wider impact of any delay in delivery of economic growth to the wider UK and local economy.

Dear

At the Urgent Business Committee on the 30th June leaders from Aberdeen City Council debated a motion from Councillor Alex Nicoll the SNP group Leader at Aberdeen City Council.  I enclose a copy of the amendment which was agreed at Committee.

While Aberdeen Harbour Board is a completely separate entity from Aberdeen City Council, Councillors have been approached by the Harbour Board following the announcement that the contractor for the Aberdeen South Harbour development, Dragados UK, has withdrawn from the contract with effect from 15th June 2020. The Committee were aware that Aberdeen Harbour Board has written to the Scottish Government to ask for the opportunity to explore how business support measures might be applied to reduce the impact COVID-19 will have on the future of the Aberdeen South Harbour expansion project.

The Committee noted the COVID-19 crisis and the public health response to control the virus has already had a detrimental economic impact on Aberdeen and global economies.

The Committee were concerned the impact these challenges may have on the future delivery of the Aberdeen harbour expansion project and the impact this will have on the Scottish economy given the Aberdeen Harbour Extension is estimated to delivery approximately £1billion GVA for the Scottish Economy by 2035.

Councillors noted the Scottish Government’s announcement with regard to the £62m to help achieve with our ambitious net zero targets as well as for the proposed Energy Transition Zone.

The Council endorses the Scottish Government’s four-step economic plan – response, reset, restart and recover for the Scottish economy post-crisis and the pathway to achieving it, which includes support for near-term growth and employment as part of the pathway. The Committee agreed that if the Scottish Government are serious about achieving this four-step economic plan then direct financial support measures must be considered by the Scottish Government to ensure the Aberdeen Harbour extension project delivers economic growth and jobs for Aberdeen Scotland and the United Kingdom.

We trust you will consider the approach you have had from Aberdeen Harbour Board and from ourselves and consider making the necessary financial arrangements to secure the viability of this worthwhile project.

cc  Aberdeen Harbour Board

On a division, there voted:- for the motion (2) – Councillors Alex Nicoll and Yuill; for the amendment (3) – the Convener; the Vice Convener; and Councillor Boulton.

The Committee resolved:-

(i)         to thank Aberdeen Harbour Board for continuing to keep Aberdeen City Council and local Members informed on the project;  and

(ii)        to adopt the amendment.